DUBAI, UAE, June 5, 2023 /PRNewswire/ -- Today's action
by the U.S. Securities and Exchange Commission (SEC) comes after
extensive cooperation and recent good-faith negotiations. We are
disappointed that the SEC chose to file a complaint today against
Binance seeking, among other remedies, purported emergency relief.
We now join a number of other crypto projects facing similarly
misguided actions from the SEC and we will vigorously defend our
business and the industry. We want to be clear that while we take
the allegations in the SEC's complaint seriously, they should not
be the subject of an SEC enforcement action, let alone on an
expedited basis. They are unjustified.
From the start, we have actively cooperated with the SEC's
investigations and we have engaged in good-faith discussions to
reach a negotiated settlement to resolve those investigations. The
SEC's suit today demonstrates their recalcitrance to engage with us
substantively to resolve such concerns. Today, despite our efforts
at productive engagement, the SEC abandoned and denied us due
process, and instead unilaterally chose to litigate.
We respectfully disagree with the SEC's allegations that Binance
operated as an unregistered securities exchange or illegally
offered and sold securities, including by offering BNB, or the BUSD
fiat-backed stable coin. We work diligently to comply with laws and
regulations applicable to our business. BNB coin is not a security.
Rather, BNB is a native token, designed to create an internal
economy; thus, its value derives from its participants. BNB allows
users who want to engage with projects (such as gaming, social,
financial, or other utilities) built on those chains to transact
with BNB, creating user demand for BNB as a reflection of
community-built projects. The coins do not represent an investment
contract of any sort and as such are not securities. In addition,
BUSD is not a security. Indeed, earlier this year, another
independent agency in the United
States – the Commodities Futures Trading Commission – filed
a court action identifying the BUSD as a non-security
commodity.
Further, although it is at this time unclear whether the SEC
will follow through, the SEC's complaint suggests a desire to seek
emergency relief in the future. There is no valid basis on which
the SEC would be entitled to emergency relief. All user assets on
Binance and Binance affiliate platforms, including Binance.US, are
safe and secure, and we will vigorously defend against any
allegations to the contrary. Rather, the SEC's actions here appear
to be part of a rushed effort to claim jurisdictional ground from
other regulators—and investors do not appear to be the SEC's
priority.
Because of our size and global name recognition, Binance has
found itself an easy target caught in the middle of a U.S.
regulatory tug-of-war. The SEC's own actions throughout this matter
reveal its hasty approach to this investigation. Like other major
cryptocurrency exchanges who tried in good faith to reason with the
Commission, we were suddenly handed a "Wells notice" (a
notification that the SEC intended to recommend to the Commission
an enforcement action) earlier this year. Also like other major
exchanges, our Wells notice gave us little to no details about how
Binance had purportedly violated the law. Yet we prepared and
submitted a response, consistent with the SEC process, and
subsequently worked hard and in good faith to try to find grounds
with the SEC for a reasonable resolution.
Despite our efforts, the SEC abruptly—at the eleventh hour—just
last week issued an entirely new set of 26 different document
requests, seeking extensive information and materials on topics not
previously investigated. It now appears that these requests were
merely pretextual— when we requested a reasonable amount of time to
respond and explain why the SEC's newly-articulated "concerns" were
unfounded, the SEC threatened to instead head straight to court and
file suit to seek a preliminary injunction. Despite our willingness
to take whatever reasonable steps we could to assuage the SEC's
purported concerns, and our requests that the SEC share with us any
evidence it might have regarding its purported concerns about the
safety of client assets, the SEC rejected our attempts at
engagement and has, as we found today, gone straight to court. It
is now clear to us that the SEC's goal here was never to protect
investors, as the SEC has claimed—if that were indeed the case, the
SEC would have thoughtfully engaged with us on the facts and in our
efforts to demonstrate the safety and security of the Binance.US
platform. The SEC's real intent here, instead, appears to be to
make headlines.
The SEC's unreasonable and unfair approach has left us with no
choice but to defend our business. Binance grew at an extremely
fast pace globally, in a new and evolving industry. As the industry
has matured, so have our systems, controls, and technology. While
we have not always seen eye-to-eye with regulators and policy
makers, we have always sought to collaborate. We have restructured
our organization and personnel, upgraded our systems, and
established a new industry standard in compliance. We have also
systematically worked to establish best-in-class programs,
including investing in the most advanced technology and qualified
industry experts in our areas of need, including security and
compliance. Over the last two years alone, we have spent
$80 million on external compliance
partners.
As a result, our compliance and security controls have become
more sophisticated over time. Binance now sets the standard for
compliance across the industry. But customer security and
protection have always been, and continue to be, the hallmark of
our platforms. And user assets on Binance.US are safe; to insinuate
otherwise is irresponsible, damaging to investors, and an abuse of
the judicial process.
We want to reiterate: although this glaring lack of process and
cooperation is frustrating, what is most concerning to us is the
fact that the SEC appears to have given no consideration to the
drastic and cascading negative impact its actions today may have on
users and the industry. User security has always been paramount to
Binance, and although we will do everything we can to continue to
provide that security to our users, any subsequent ripple effects
through the platform and the industry will be directly attributable
to the SEC's unjustified decision to unilaterally litigate on a
purported emergency basis today.
The SEC's choice is disheartening for Binance, its users, and
the industry as a whole. However, this action will not stop us from
continued robust collaboration with other regulators and
policymakers across the globe, and we will continue to vigorously
defend our business and this technology.
About Binance.com
Binance is the world's leading blockchain ecosystem and
cryptocurrency infrastructure provider with a financial product
suite that includes the largest digital asset exchange by trading
volume. With 17 licenses and registrations to operate worldwide -
more than any other in the industry - and trusted by millions
worldwide, the Binance platform is dedicated to increasing the
freedom of money for users and features an unmatched portfolio of
crypto products and offerings, including trading and finance,
education, data and research, investment and incubation,
decentralization and infrastructure solutions, and more. For more
information, visit: https://www.binance.com
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